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Membership fee tax introduced from January 1, 2013 says new Law on NGO

INTERFAX-UKRAINEKyiv, December 24, 2012.

The new law on
nongovernmental organizations (NGOs), which takes effect from January 1,
2013, introduces a tax on profit received from membership fees,
President of All-Ukrainian medical union Oleh Musiy said at a press
conference at Interfax-Ukraine on Monday.
"The state will
additionally levy a membership fee tax. When organizations obtained the
status of unprofitable organizations, one of the obligatory requirements
was the availability of membership fees – this allowed obtaining the
status," Musiy said.
Thus, from January 1, 2013 all of the
organizations which collect membership fees automatically become
commercial organizations. They will be considered commercial
organizations until they re-register the status of unprofitable
organizations in the tax body.
"Now we will have to re-register the
status of unprofitable organizations in the State Tax Service and from
January 1, 2013 we'll automatically become the commercial organization
until we re-register the status," he said.
The head of the legal
department at Ukrcement Association, Yevhen Miliavsky, said that at
present, all the sector associations are unprofitable organizations and
they do not pay value added tax.
He said that Article 19 of the said
law establishes some criteria for the All-Ukrainian association status,
and many existing organizations are not in line with them.
"One of
the [criteria] is the number of branches. For example, our regulations
and specifics of our operations do not foresee the availability of
structural divisions. We don't have structural divisions. We have
plant-members in the regions," Miliavsky said.
A managing partner at
JSC Volkov and Partners Oleksiy Volkov said that the law has created
many difficulties in understanding and using the institution of
nongovernmental organizations in Ukraine, although its introduction from
January 1, 2013 will be a first step of testing it in practice.
"The
law is the required step, despite the fact that it should be revised.
However, we should start from the implementation of the law. The next
step will be its modification," Volkov said.
As reported, members of
the forum of nongovernmental organizations of Ukraine called on the
Ukrainian president to submit a draft law on the postponement of the
taking effect of the law on NGOs for January 1, 2014.
Forum members said that the law brings a threat to operation of NGOs and Ukrainian society as a whole.